By Sarah Young
LONDON, Oct 7 (Reuters) - Oil companies eyeing Somalia'sexploration potential must sign contracts only with its centralgovernment, a minister said, dismissing as invalid existingdeals between regional governments and companies such as GenelEnergy.
The East African coastline has rapidly emerged as one of theworld's hottest oil exploration areas. Waters off Somalia, acountry trying to put two decades of armed chaos behind it, areexpected to be the next on the radar of oil and gas companies.
Some companies have already started to move in, but theyhave signed contracts with the governments of two differentregions, the breakaway Somaliland enclave in the case ofLondon-listed Genel and Norway's DNO, andsemi-autonomous Puntland in the case of Canada's Africa Oil Corp.
"From the perspective of the government these are not validlicences and they (the companies) should start negotiations withthe federal government," Somali Minister of Natural ResourcesAbdirizak Omar Mohamed said on the sidelines of a conference.
"There are legal questions that need to be addressed."
Genel declined to comment on what the minister said, whileAfrica Oil and DNO could not immediately be reached for comment.
The central government in Mogadishu faces a huge task intrying to unite a nation with devolved powers after two decadesof war and clan strife.
U.N. monitors warned in a report in July that Westerncommercial oil exploration in disputed areas of Somalia anddiscrepancies over which authorities can issue licences to firmscould spark further conflict in the country.
The minister said security conditions were "sufficient" forcompanies that have contracts dating from before a civil warstarted in 1991 to return and end long periods of force majeure.
"We will honour their concessions. We will honour theirrights. We want them to come back," he said, appealing to theworld's largest oil company Exxon Mobil and Shell, which both had a presence prior to 1991.
In addition to the ongoing security concerns - in focusafter the Sept. 21 Westgate mall attack in neighbouring Kenyawhich killed at least 67 people - Somalia is yet to adopt a newpetroleum law, an issue that Omar Mohamed conceded was taking"some time".
Soma Oil & Gas, a privately owned London-based company, tookthe plunge into Somalia earlier this year, signing a deal withthe government to provide it with geological data.
When asked about the threat from pirate attacks, Somapointed out that their incidence has fallen in the last twoyears due to increased naval patrols and the presence of armedsecurity teams on ships.
Omar Mohamed was also hopeful of an end to a row betweenKenya and Somalia over their maritime border, another potentialthreat to the hunt for resources in that part of the world.
"Somalia is ready to start a dialogue with Kenya and startdiscussions and resolve it in a peaceful way," he said of thefrontier dispute.
